How to Dissolve an LLC in Idaho? (Most Effective Method)
If you're a business owner and you've decided to dissolve your Idaho Limited Liability Company, you'll need to take the appropriate steps to ensure everything is done legally and correctly.
As a certified legal expert with over a decade of experience, I will walk you through the important steps you should follow for your Idaho LLC to officially terminate.
In this article, I will provide you with all the information you may need to dissolve an Idaho LLC properly.
- To dissolve an Idaho Limited Liability Company, notify creditors, settle debt, and file dissolution papers.
- The dissolution process can voluntarily begin after members have agreed and voted as per the operating agreement.
- Considering that Lending Tree reports a 22.3% business failure rate in Idaho within the first year and 64.4% within the first ten years, understanding the proper dissolution process is crucial for LLC owners facing unforeseen challenges.
- In my professional opinion, understanding and preparing for the dissolution process is crucial, given the high rate of business turnovers in Idaho.
6 Steps To Dissolving an LLC in Idaho
Follow these six steps to disband your Idaho LLC correctly.
Step 1: Vote To Dissolve an LLC
If your Limited Liability Company has more than one member, you'll need to follow the provisions laid out in your LLC's operating agreement.
This document will outline how the dissolution process should be handled, so you must review it carefully before taking any action.
In most cases, dissolving an Idaho LLC will require a dissolution vote by the members of the LLC, and a majority vote will be needed in order to officially dissolve the company.
Step 2: Notify Creditors About Your LLC's Dissolution
While filing your final tax returns, consider the broader economic trends affecting Idaho businesses. The US Small Business Administration found that 7,047 establishments in Idaho closed between March 2021 and March 2022 .
This data reflects the challenging environment in which your business operates and underscores the importance of completing your tax obligations thoroughly.
The notice should include the date of the dissolution and your contact information.
In our case, once we had sent the notices, we waited for 30 days before taking any further action. This waiting period gave creditors time to submit their claims against our LLC.
Once the waiting period has passed, you can proceed to the next step.
Step 3: File Final Tax Returns and Obtain Tax Clearance
Another important step in dissolving your LLC in Idaho is to close all tax accounts associated with the business. This includes state and federal tax accounts.
To do this, we filed a final tax return for our Limited Liability Company, which officially dissolved the company for tax purposes.
"Once you've filed the final return, you'll need to contact the Idaho Department of Revenue and let them know that your LLC is no longer in business."
-Jon Morgan, Co-Editor & Co-Founder of Venture Smarter
Step 4: File Articles or Certificate of Dissolution
The following step is to file Articles of Dissolution with the Idaho Secretary of State . You can file the Articles of Dissolution online, by mail, or in person.
The Articles of Dissolution must be signed by all of the LLC members and must include the following information:
- The business name
- The date of dissolution
- The signature of all LLC members
There is a $20 filing fee to dissolve an LLC in Idaho. Additionally, there may be other costs associated with winding up your business, such as paying off debts or canceling licenses and permits.
The following are the methods for paying for the dissolution:
- Online: You can pay online with a credit card
- By Mail: You can send a check or money order to the Idaho Secretary of State
- In-Person: You can pay in person with cash, check, money order, or credit card.
After submitting our Articles of Dissolution, they were approved in 7 days and we received a confirmation copy of the change by mail.
Step 5: Distribute Assets
The following step in dissolving an LLC in Idaho is to distribute any remaining business assets among the members of the LLC.
This includes dividing up any cash, property, or other assets that are owned by the business.
The distribution should be done according to the LLC's operating agreement terms. If the agreement is absent, the Idaho state law mandates an equitable distribution of assets based on the members ownership stakes.
Step 6: Close All Accounts and Cancel Licenses and Permits
The last step is to close any business accounts and permits affiliated with the LLC.
But before doing so, you must settle any outstanding business obligations including paying off any debts, liabilities, or other financial obligations.
Once you have paid off all of your debts, you will need to close all of your business bank accounts, savings and checking accounts, and credit cards.
During our dissolution, we had to send formal requests to the bank and submit various documents to close the accounts.
You should also notify the relevant licensing agencies and inform them that your Idaho LLC is dissolved and cancel any licenses and permits your business holds.
What Is the Difference between Dissolving and Terminating an LLC?
The main difference between dissolving and terminating an LLC is that dissolving an LLC means that the company no longer exists and all business operations have ceased. Terminating an LLC means that the company is still in existence but is no longer doing business.
How Much Does It Cost to Dissolve an LLC in Idaho?
It costs $20 to dissolve an LLC in Idaho. The filing fee covers the processing of the Articles of Dissolution.
How Long Does It Take to Dissolve an LLC in Idaho?
It takes approximately 7 business days to dissolve an LLC in Idaho.